Today’s News May 26, 2015

• Chinese Stocks Are Now Up Over 100% Year-To-Date

  Another day, another dip to be bought aggressively in China. The only catalyst for moar – aside from “well it was up yesterday” – is the news that the Shanghai-HK Stock Exchange aggregate quota will be abolished, leaving room for more speculative excess to flood into 500%-gainers.  CSI-300 is now up almost 6% since Friday’s close and Shenzhen and CHINEXT are soaring back from underperformance yesterday. To round things out on a superlative note, the Shenzhen Composite – which contains all the ponzi-based self-collateralized idiot-makers, is now up over 100% year-to-date. Simply put, you can’t keep a bad market down…

   

  

   

  Which has sent the Shenzhen Composite above the 100% return mark for 2015…

  

   

  Charts: Bloomberg

  

  

  
  
  

  

• Global Trade Dives Most since the Financial Crisis

  Wolf Richter   www.wolfstreet.com   www.amazon.com/author/wolfrichter

  How great was the global economy in the first quarter?

  We know the US economy was crummy. The revised GDP estimate will likely sink into red mire. Hence the heated proposals these days, including at the Fed, to apply “a second round of seasonal adjustment” that would “correct” the first-quarter GDP estimate, no matter how bad, into positive territory. An elegant way of covering up an unsightly sore.

  So was it just a crummy quarter in the US, or was it a global thing, in which case we might have to apply a “second round of” whatever to adjust the global downturn out of the picture?

  Because here is the thing: in the first quarter, one of the crucial measures of the global economy – global trade – slumped the most since the Financial Crisis. But ironically, it wasn’t because of the USA.

  The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its latest Merchandise World Trade Monitor, which covers global import volumes as well as global export volumes. The index dropped 0.1% in March to 136.5, after having already dropped 0.7% in February, and 1.7% in January. The index, which was set at 100 in 2005, is now down 2.5% from the peak of 140.0 in December. That 3.5-point decline was the sharpest since the Financial Crisis.

  This chart, going back to January 2012, doesn’t exactly inspire confidence in the current state of the global economy:

  

  To mitigate the volatility of these kinds of monthly numbers, the CPB offers a measure of trade volume “momentum,” which it defines as “the change in the three months average up to the report month relative to the average of the preceding three months.”

  That trade momentum measure slumped 1.5% in March, the largest monthly decline since April 2011, after having edged down 0.4% in February. It now amounts to the most negative “momentum” since the Financial Crisis.

  This chart, going back to 2010, looks even worse than the prior chart. This sort of thing isn’t supposed to happen in an expanding, or even a stagnating, global economy:

  

  Both of the measures above involve import and export volumes. With volumes now actually declining and with new shipping capacity coming on line throughout the period, pricing per unit, in dollars, has plunged 15% since June 2014, and nearly 20% since the peak in March 2011. It’s now at the lowest level since May 2009:

  

  But the trade debacle wasn’t spread evenly. For March, the CPB reported:

  A positive turnaround occurred in both import and export growth in advanced economies. Imports bounced back strongly in the United States. They contracted deeply in Japan however. In emerging economies, import growth accelerated, but export growth became heavily negative on account of a deep fall in emerging Asia’s exports.

  And that would be mostly China.

  Hard-landing gurus have been predicting an imminent end of the China bubble for years. But there was no hard landing, or a soft landing, or any landing for that matter. China just kept on flying, fueled by an enormous credit bubble and monetary propellants. But now it’s running out of air. Read…  China Momentum Indicator Plunges to “Hard Landing” Level

  

  
  
  

  

• How The Saudis Wag The Washington Dog

  Submitted by Andrew Levine via Counterpunch.org,

  American diplomacy favors (majority) white, English-speaking countries (the UK, Canada, Australia and New Zealand) and non-Hispanic European settler states (Canada, Australia and New Zealand again, but also Apartheid South Africa and, of course, Israel).

  South Africa eventually fell out of favor, thanks in part to boycott, divestment and sanctions efforts in Western countries.

  Similar efforts now underway directed towards Israel are beginning to change public opinion too; though elite opinion, in the United States and the other settler states especially, has, so far, hardly budged.

  Thanks to its lobby and its strategic location, Israel is still, for America, the most favored nation of all.

  Western European countries are also favored, though to a lesser extent – thanks, again, to cultural affinities and historical ties. Those that sent large numbers of emigrants to North America generally have a leg up. France didn’t send many emigrants, but it is also favored, at least some of the time, for philosophical and historical affinities dating back to the American and French Revolutions.

  With Saudi Arabia and the other Gulf monarchies, there are no deep or longstanding cultural and historical ties; quite the contrary. Nevertheless, those nations, Saudi Arabia especially, receive favored treatment too.

  The events surrounding the death of Osama bin Laden provide a window into this strange and revealing state of affairs.

  *  *  *

  When Barack Obama lied about how Navy Seals murdered bin Laden, he blew apart a carefully constructed cover story concocted in Washington and Islamabad intended to conceal the role of Pakistani intelligence and the Pakistani military.

  According to Seymour Hersh’s account in The London Review of Books, bin Laden had been in Pakistani custody at least since 2006. American intelligence learned of this some four years later, when a “walk-in” gave them information that checked out.

  The raid itself took place a year after that, in time for the 2012 Presidential election in the United States.

  The Pakistanis had reasons for keeping bin Laden in custody and out of American hands. It gave them leverage with the Taliban and with the remnants of Al Qaeda, as well as with other radical Islamist groups.

  The Saudis wanted bin Laden kept in Pakistan too; away from the Americans. According to Hersh, they paid Pakistan generously for their trouble.

  Hersh’s article does not dwell on their motives, but, in interviews he has given after his article went on line, he is less reticent.

  The Saudis didn’t want the United States to get its hands on bin Laden because they didn’t want him to talk about Saudi involvement in 9/11 and other operations directed against Western interests.

  This is only a conjecture, but it makes eminently good sense. It isn’t even news. Like the fact that the Israeli arsenal includes nuclear weapons, everybody knows about the Saudis’ role, but nobody in official circles or in the media that toes its line talks about it.

  Since his article appeared, official Washington and mainstream media line have gone after Hersh with a degree of vehemence reminiscent of their attack on Edward Snowden.

  They hate it when their bumbling is revealed, almost as much as when the hypocrisy of their claims to respect human rights and the rule of law is exposed.

  But, for all the sound and fury, they have not effectively rebutted a single one of Hersh’s contentions – nor, for that matter, any of Snowden’s.

  If Hersh is right, as he surely is, then two of America’s closest allies were, to say the least, not acting the way that allies should.

  Capturing bin Laden was officially – and probably also really – a high priority for the United States.   Pakistan and Saudi Arabia kept him from being captured.

  However, none of this appears to have harmed U.S.-Pakistani or U.S.-Saudi relations.

  The rulers of both countries depend on American support to survive.   And yet, when they choose, they defy their protector with impunity. Israel isn’t the only country that wags the dog.

  Pakistan gets carte blanche because, like Israel, it has the Bomb. Keeping the Bomb out of the hands of anyone who might use it – especially, against the United States or its interests abroad — is, understandably and legitimately, a goal of American diplomacy.

  And so, the United States will do what it must to keep the Pakistani military and intelligence communities happy and on board.

  This is not easy: the Pakistanis have been involved with radical Islamists from Day One. By all accounts, contacts survive to this day.

  The United States encouraged these connections, especially when the prospect of getting the Soviet Union bogged down in Afghanistan clouded the thinking of diplomats in the Carter and Reagan administrations.

  But, since even before the Americans became involved, the Pakistanis have been going their own way in Afghanistan – partly for cultural and historical reasons of their own, and partly to keep India at bay.

  For all these reasons, the Americans have found it expedient to buy off the leaders of the Pakistani military and intelligence communities.   Therefore, whenever possible, in light of the totality of their concerns, they give them what they want. What the Pakistanis wanted with the bin Laden killing was plausible deniability.

  This was the point of the story that Obama blew. Therefore when he, or his political operatives, decided that, with the 2012 election looming, the moment was opportune to announce bin Laden’s death, they had to concoct a different story that would also keep the Pakistani role secret.

  The one they made up had the added benefit of reinforcing the swashbuckling image that the Navy Seals, Obama’s Murder Incorporated, try to project. Hollywood got the message, and made the most of it.   So did the Obama campaign.

  But, for reasons Hersh explains, the fable they concocted was transparently implausible; a point not lost on observers at the time.

  To point this out, back in the day, was to risk being taken for a “conspiracy theorist” – or, worse, a Romney supporter.

  Now that a definitive account of what happened has appeared, it is plain who the real conspirators were.

  And so, by now, only the willfully blind – and the Washington press corps — believe the tale Obama told.

  Needless to say, it is not exactly news when Obama lies; in the “man bites dog” sense, it would be news if he didn’t.

  And neither is the duplicity of Pakistan’s military and intelligence leadership surprising.   Politics in the Indian sub-continent is as devious and convoluted as anywhere in the world.

  In Pakistan, as in Iraq and Syria, the stewards of the American empire – the ones who worked for Bush and Cheney, and the ones who have worked for Obama and his hapless Secretaries of State — are in way over their heads. They are like the proverbial bull in the china shop; powerful and therefore destructive, but ultimately clueless.

  American obeisance to the wishes of the Saudi royal family is not unusual either.  The United States has been toadying up to them since the days of Franklin Roosevelt. They have oil, and we want to control what they do with it.

  However, the fact that the American public, and its counterparts in other Western countries, goes along, almost without dissent, is puzzling in the extreme.

  The American way, after all, is to villainize first, and ask questions later.

  The Saudi royals, and the ruling potentates in the other Gulf kingdoms, are prime candidates for villainization. They are characters out of central casting.

  One would think that a public that loathes, or has been made to loathe, Vladimir Putin and Bashar al-Assad – and that still goes livid at the very thought of the Iranian Ayatollahs and Saddam Hussein — would be out with pitchforks demanding the heads of each and every member of the Saudi ruling class.

  They were, after all, if not the perpetrators, at least the protectors of the perpetrators, of 9/11, a “day of infamy,” our propaganda system tells us, equal only to the day the Japanese bombed Pearl Harbor.

  And yet the public’s ire seldom turns the Saudis’ way.

  This is all the more remarkable because they have neither a Bomb nor a domestic lobby that the entire American political class fears.

  All they have is a massive public relations operation. Evidently, the flacks they hire know their trade. No matter how much money they are paid, they earn every cent.

  * * *

  Ironically, the Saudis’ hold over America’s political and economic elites is an unintended consequence of American diplomacy in the days when the United States was, or seemed to be, on the side of the angels.

  When Britain or France wanted Middle Eastern oil – in Iraq or Iran, for example, — they took it. They were colonial powers; this is what colonial powers do.

  Before World War II, American diplomats cultivated a different image. Washington’s cupidity may have been no less than London’s or Paris’; but, in the White House and at Foggy Bottom, the idea was to present the United States as, of all things, an anti-colonial power.

  Never mind Puerto Rico or the Philippines or, for that matter, Hawaii and the several other Pacific islands that the U.S. Navy coveted; and never mind America’s obvious collusion – before, during, and after World War II — with the British and French empires.

  It is true, though, that in the Middle East, American domination took a different form. When American oil companies wanted Middle Eastern oil, they didn’t seize it; they bought it from the rulers of the peoples who live on top of it.

  And, if there weren’t rulers willing or able to sell, the Americans created them.

  The House of Saud made out like bandits. For the oil companies, it was a small price to pay.

  The U.S. got control of the oil without having to administer rebellious colonies. Meanwhile, local elites got rich.   All they had to do for the money was give the Americans free rein and enforce the order that made American domination possible – with American help, of course, and with arms purchased from American corporations.

  And so, until reality made the pretense unsustainable, the U.S. could present itself, throughout the Middle East, as a defender of anti-colonial, independence movements.

  As other Gulf states broke free from British rule, the U.S. took over, applying the same model. This worked well — for a while.

  Before long, though, the Saudi regime, and he others, became too big to fail.

  This is why, even as the Clinton State Department floundered about cluelessly when the Arab Spring erupted, the prospect of allowing those regimes to fall was never seriously considered.   For official Washington, this was as unthinkable as allowing nuclear Pakistan to “go rogue,” or not kowtowing to the Israel lobby.

  When there is a disconnect between public and elite opinion, elites generally win, but not always: not when too many people care too much. American elites, eager to maintain the status quo, like the PR people the Saudis hire to keep public opinion from getting out of control, therefore have their work cut out for them.

  Some of the reasons for this reflect poorly on the moral probity of public opinion in the West.

  In their appearance, manner and demeanor, the Saudi ruling class epitomizes the Western idea of the Arab.

  Even before Europeans inserted themselves into the Arab world, Arabs have occupied a special place in the imaginations of Western peoples.

  Like many of the other peoples of the East, they were deemed mysterious and exotic, highly sexualized, and vaguely dangerous.

  But, unlike Turks and Persians or the peoples of South Asia and the Far East, and like Africans and the indigenous peoples of the Americas and Australasia, Arabs were never quite regarded as fully human.

  The Saudi PR machine therefore has deeply racialized attitudes to counter. The Saudis epitomize “the other”; this makes them a hard sell.

  They also epitomize the retrograde, which makes them a hard sell for reasons that have nothing to do with racial or cultural stereotypes — and everything to do with modern political morality.

  There is hardly a reactionary trend in the Muslim world that the Saudis haven’t supported financially; and there are few that they did not actually instigate or help shape.

  Also, there are few places on earth where human rights and gender equality are less respected, or where liberal and democratic norms hold less sway, than in Saudi Arabia.

  Elites in that country and in the other Gulf monarchies are rich and idle because they are sitting on top of vast oil reserves, and because they have accumulated so much wealth that they can exploit “guest workers” in the ways that masters exploit slaves. No one holds them to account for this or anything else untoward that they do.

  In a world that permits, indeed encourages, private ownership of natural resources and the limitless accumulation of wealth — and that is largely indifferent to the harm petroleum extraction does — they won the lottery.

  This could make them objects of envy, of course; and envy tinged with racial animosity is a lethal brew. Yet, for all practical purposes, the Saudis get a pass – not just in Western elite circles and within the political class of Western countries, but in Western public opinion too.

  It has been this way ever since the phasing out of the short-lived Arab oil embargo brought on by American support for Israel in its 1973 war against Egypt.

  The Saudis’ immunity from public rancor is all the more amazing because it would be easy to rationalize – indeed, to justify – turning them into objects of scorn.

  Inasmuch as our moral intuitions took shape over many centuries, under conditions in which nearly everything everyone wanted was in short supply, we are inclined to think that, where the distribution of income and wealth are concerned, principles of fair play apply; and therefore that “free riding” on the contributions of others is morally reprehensible.

  In existing capitalism – and, indeed, in all class divided societies – plenty of free riding nevertheless occurs. It is so commonplace that people often don’t notice it or don’t care. Sometimes, though, when people get something for nothing, it can be enough over the top to cause consternation. When the free riders stand out conspicuously, the level of consternation is typically enhanced.

  Saudi Arabia’s feudal rulers, and their counterparts in other Gulf states, are about as over the top as it gets.

  Other than maintaining the profoundly oppressive order that makes the status quo possible in the territories they control, it is hard to think of any contributions, productive or otherwise, that they make to justify the riches they receive.

  But, as finance has superseded industry as the driving force behind the world’s overripe capitalist system, Western publics have become more accustomed than they used to be to rewarding unproductive people.

  The robber barons of old, and the “industrialists” who succeeded them, at least played a role in increasing society’s wealth. The enterprises from which their riches derived made things. The money people at the cutting edge of capitalism today make money out of money, an activity even more useless than collecting rents for drilling rights.

  Yet, hostility is seldom directed towards them. Quite the contrary: the richer they are, the more they are esteemed.

  Could the sort of confused and obsequious thinking that has made hedge fund managers the heroes of our age account, in part, for how Saudi elites escape vilification? Is this yet another situation where, if you are rich enough, everything is forgiven?

  No doubt, this is part of the explanation. But a government intent on keeping public and elite opinion on the same page is a more important factor.   Add on a lavishly funded PR campaign and an entire category of miscreants gets off scot-free.

  That there is no group of people on earth today to whom the epithet “malefactors of great wealth” more justly applies hardly matters. The Western public may not like them much or respect them; but, so long as they don’t flaunt their wealth too blatantly, hardly anyone complains when Western politicians let them call the shots.

  Meanwhile, Islamophobia rages and a gullible public lives in mortal fear of terrorist bogeymen.   And yet the Saudi elite gets a pass, notwithstanding the fact that nearly all the perpetrators of 9/11 — of the event that, more than any other, boosted Islamophobia and got the so-called war on terror going — were Saudi nationals. It is an amazing phenomenon.

  * * *

  In real democracies, governments would do what the citizens who put them in office want them to do. The United States and other Western democracies make a mockery of that ideal. But, even so, there are limits; governments cannot defy public opinion on matters of great moment indefinitely.

  It is also the case, at least in the United States, that public opinion is affected significantly by the very government that is supposed to do what the people want – and therefore, ultimately, by the demands of the corporate and financial forces that corrupt democracy.

  This is why propaganda matters. Keeping public opinion in line is a function, perhaps the main one, of propaganda systems. In America in the Age of Obama, that is one of the few things that works well.

  We underestimate its effectiveness at our peril.

  Enabling the Saudi ruling class, and the rulers of the other Gulf states, to direct American foreign policy to the extent that they do, and to get away with whatever they please, is hardly the least of it; but neither is it the only cause for concern.

   

  

  

  
  
  

  

• Now Hiring In China: Porn Identification Officers

  

   

  Source: Global Times

  

  
  
  

  

• ISIS Planning US Nuclear Attack In Next 12 Months: Report

  Three weeks after the first supposed attack by Islamic State supporters in the US, in which two ISIS “soldiers” wounded a security guard before they were killed in Garland, Texas, the time has come to raise the fear stakes.

  In an article posted in the terrorist group’s English-language online magazine Dabiq (which as can be see below seems to have gotten its design cues straight from Madison Avenue and is just missing glossy pages filled with ‘scratch and sniff’ perfume ads ) ISIS claimed that it has enough money to buy a nuclear weapon from Pakistan and “carry out an attack inside the United States next year.”

  

  In the article, the ISIS columnist said the weapon could be smuggled into the United States via its southern border with Mexico.

  Curiously, the author of the piece is John Cantlie, a British photojournalist who was abducted by ISIS in 2012 and has been held hostage by the organization ever since; he has appeared in several videos since his kidnapping and criticized Western powers.

  

  John Cantlie

  As the Telegraph notes, “Mr Cantlie, whose fellow journalist hostages have all either been released or beheaded, has appeared in the group’s propaganda videos and written previous pieces. In his latest work, presumed to be written under pressure but in his hall-mark style combining hyperbole, metaphor and sarcasm, he says that President Obama’s policies for containing Isil have demonstrably failed and increased the risk to America.”

  Cantlie describes the following “hypothetical” scenario in Dabiq :

  Let me throw a hypothetical operation onto the table. The Islamic State has billions of dollars in the bank, so they call on their wil?yah in Pakistan to purchase a nuclear device through weapons dealers with links to corrupt officials in the region.

   

  The weapon is then transported overland until it makes it to Libya, where the muj?hid?n move it south to Nigeria. Drug shipments from Columbia bound for Europe pass through West Africa, so moving other types of contraband from East to West is just as possible.

   

  The nuke and accompanying muj?hid?n arrive on the shorelines of South America and are transported through the  porous borders of Central America before arriving in Mexico and up to the border with the United States.

   

  From there it’s just a quick hop through a smuggling tunnel and hey presto, they’re mingling with another 12 million “illegal” aliens in America with a nuclear bomb in the trunk of their car.

  Cantlie continues:

  Perhaps such a scenario is far-fetched but it’s the sum of all fears for Western intelligence agencies and it’s infinitely more possible today than it was just one year ago. And if not a nuke, what about a few thousand tons of ammonium nitrate explosive?

   

  That’s easy enough to make. The Islamic State make no secret of the fact they have every intention of attacking America on its home soil and they’re not going to mince about with two muj?hid?n taking down a dozen casualties if it originates from the Caliphate. They’ll be looking to do something big, something that would make any past operation look like a squirrel shoot, and the more groups that pledge allegiance the more possible it becomes to pull off something truly epic.

   

  Remember, all of this has happened in less than a year. How more dangerous will be the lines of communication and supply a year on from today? If the West completely failed to spot the emergence of the Islamic State and then the allies who so quickly pledged allegiance to it from around the world, what else of massive significance are they going to miss next?

  One can, of course, debate just how much the West “failed to spot the emergence of ISIS” considering it was not only the CIA which initially trained the terrorist organization in Jordan in 2012, but according to recently declassified Pentagon documents, the US was well aware the outcome its attempt to overthrow Syria’s Assad would have on the region, in the process “creating” ISIS, aka al Qaeda 2.0.

  In other words, even the “hypothetical operation” involving a nuclear attack on US soil would implicitly have the blessing of the US government. Which, considering the way the stock market surges every time the US economy deteriorates further on its way towards recession, probably means that a mushroom cloud appearing in some major US metropolitan area is just what the E-mini algos would need to send the S&P500 limit up.

  Finally, we leave it up to our readers to decide for themselves just who is behind the production of the Islamic State’s magazine Dabiq, whose latest issue, #9, is shown below. One thing is clear: unlike the Greek finance minister and the European Commission, ISIS knows all about purging metadata after posting a pdf to avoid identification of the original author.

  

  

  
  
  

  

• Chinese State Paper Warns "War Will Be Inevitable" Unless U.S. Stops Meddling In Territorial Dispute

  Whereas over the past year, ever since the outbreak of the hostilities over the fate of Ukraine following the Victoria Nuland orchestrated presidential coup, relations between Russia and NATO have devolved to a Cold War 2.0 state as manifested by countless interceptions of Russian warplanes by NATO jets and vice versa as depicted in the following infographic…

  

  … at least China was mercifully allowed to stay out of the fray between the Cold War enemies.

  This all changed this month when first the Pentagon’s annual report to Congress this month cast China as a threat to regional and international peace and stability, followed several weeks ago when, with China aggressively encroaching into territories in the South China Sea claimed by US allies in the region such as Philippines, Vietnam and Japan, the US decided to get involved in yet another regional spat that does not directly involve it, and started making loud noises about China’s territorial expansion over the commodity-reach area.

  China promptly relatiated by threatening a US spy plane during a routine overflight, while immediately thereafter the US retaliated at China’s escalation, and warned that building sea “sandcastles” could “lead to conflict.”

  Far from shutting China up, earlier today China said it had lodged a complaint with the United States over a U.S. spy plane that flew over parts of the disputed South China Sea in a diplomatic row that has fuelled tension between the world’s two largest economies.

  Quoted by Reuters, Chinese Foreign Ministry spokeswoman Hua Chunying said on Monday China had lodged a complaint and that it opposed “provocative behaviour” by the United States.

  “We urge the U.S. to correct its error, remain rational and stop all irresponsible words and deeds,” she said. “Freedom of navigation and overflight by no means mean that foreign countries’ warships and military aircraft can ignore the legitimate rights of other countries as well as the safety of aviation and navigation.”

  China had noted “ear-piercing voices” from many in the U.S. about China’s construction on the islands and reefs.

  In other words, China just imposed an effective “no fly zone” for US spy planes, a dramatic shift from its recent posture when it tolerated and turned a blind eye to US spy plane overflights. Going forward, the US has been explicitly warned not to fly over China or risk the consequences.

  

  This handout photo taken on March 16, 2015 by satellite imagery provider Digital Globe shows a satellite image of vessels purportedly dredging sand at Mischief Reef in the Spratly Islands in the disputed South China Sea

  And just to confirm that if the US had hoped it could threaten Beijing into submission and force the Politburo into curbing its expanionist appetit, it was dead wrong, the nationalist Global Times, a paper owned by the ruling Communist Party’s official newspaper, the People’s Daily, said in a Monday editorial that war was “inevitable” between China and the United States unless Washington stopped demanding Beijing halt the building of artificial islands in the disputed waterway.

  PressTV has more details:

  A war between the United States and China is “inevitable” unless Washington stops demanding Beijing halt its construction projects in the South China Sea, a Chinese state-owned newspaper warns.

   

  “If the United States’ bottom line is that China has to halt its activities, then a US-China war is inevitable in the South China Sea,” The Global Times, an influential newspaper owned by the ruling Communist Party’s official newspaper the People’s Daily, said in an editorial Monday.

   

  “We do not want a military conflict with the United States, but if it were to come, we have to accept it,” said The Global Times, which is among China’s most nationalist newspapers.

   

  Beijing last week said it was “strongly dissatisfied” after a US spy plane defied multiple warnings by the Chinese navy and flew over the Fiery Cross Reef, where China is reportedly building an airfield and other installations.

   

  “The intensity of the conflict will be higher than what people usually think of as ‘friction’,” it warned.

   

  The paper also asserted that China was determined to finish its construction work in the South China Sea, calling it Beijing’s “most important bottom line.”

  Such commentaries are not official policy statements, but are sometimes read as a reflection of government thinking.

  More importantly, they serve as populism-timestamped warnings that US demands for a Chinese retreat over what the world’s most populous nation considers’ its own national interest, will backfire dramatically and the next time a US spy plane flies over the Spratly Islands, or Beijing’s smog for that matter, a very serious diplomatic incident may ensue.

  

  

  
  
  

  

• Guest Post: Gray Skies And Memorial Day Reflections

  Submitted by Scott Spangler via JetWhine.com,

  Most Americans today have but two connections with those who serve and have served in the military, and especially those who have perished in that service. The first is the hollow seconds it takes to utter “Thank you for your service,” an seemingly autonomic reflex when seeing someone in uniform. The other occurs should they see a film about any of our many conflicts. Since America’s last declared war, which ended 70 years ago, Memorial Day has become an annual celebration of patriotic hypocrisy, when people might notice that the American flag they ran up their front yard pole last year is faded and frayed and, maybe, add a new one to their celebration’s shopping list.

  True appreciation is measured by our depth of experience and understanding.

  Today, less than 1 percent of the population reaps the benefits resulting from the service and sacrifice of the less than 1 percent of the population who serve the politicians elected by the majority of people who separate, and have no direct involvement with, these two segments of society. And this disconnection and separation is no accident.

  During the war Congress declared the day after the attack on Pearl Harbor, citizens didn’t thank members of the military for their service because everyone, one way or the other, was involved and contributed to a successful outcome. For many, Korea is a forgotten conflict, but it set the stage for all the undeclared conflicts that followed. War, as Eisenhower warned, is big business, and public protest is a political challenge that complicates their promotion and prosecution. Vietnam proved this, and people protested because the draft could send any one of them into harms way. And on the nightly news they would watch their loved ones suffer for a cloudy cause.

  The politicians, most of whom have never served and faced the possibility of a sudden end to life, solved this problem by replacing the draft with the all volunteer force. And never again would the news media work with the unrestricted access it had in Vietnam. Nor could they show the return of flag-draped transfer cases. “Privacy,” the politicians said, but certainly a planeload of flags bedecked boxes says something more—something different—than a missing-man flyover and the single triangle-folded flag presented to the family to conclude a funeral’s full military honors.

  Understanding is the antidote for hypocrisy, and films that promote and criticize America’s endless series of conflicts can contribute to it. Watching requires more involvement than saying “Thanks” to a uniformed stranger. Put yourself in the protagonist’s place and wonder how you—and your family—would feel and deal with the consequences projected on the screen. Build on this understanding, test its veracity with questions and settle for nothing less than a direct answer to it, make it a resource that guides your daily decisions.

  In so doing you can honestly honor those for whom this holiday was created after the nation’s most catastrophic conflict, the U.S. Civil War, which took the lives of roughly 620,000 individuals in military service.

  

  

  
  
  

  

• Greece Was 20 Votes Away From Defaulting This Weekend

  Up until this moment, Greece may not have had the financial wherewithal to pay its creditors, forced instead to use circular math gimmicks in which the IMF paid the IMF for the country’s most recent €750 million due on May 12 when it effectively pre-defaulted and used SDR reserves as “payment”, but at least it had a united facade when facing Europe and political cohesion when dealing with the Troika.

  That too may have just evaporated over the weekend, when in a surprisingly close vote showing just how deeply the ruling Greek Syriza party has splintered, the hard line “Left Platform” a faction within Syriza, proposed that Greece stop paying its creditors if they continue with “blackmailing tactics” and instead seek “an alternative plan” for the debt-racked country. Its motion called for the government to default on the IMF loans rather than compromise to creditor demands, among which a change to value-added tax rates, further liberalization of the labor market and changes to the pension system, including further cuts to pensions and wages.

  According to the NYT, which first reported the vote outcome, the proposal was narrowly rejected with 95 people voting against and 75 in favor.

  The WSJ adds:

  The Left Platform’s leader, Energy Minister Panagiotis Lafazanis, told the meeting default was preferable to surrender, even if it meant Greece tumbling out of the euro.

   

  “Who says that an exit from the euro and a return to the national currency is a catastrophe?” Mr. Lafazanis said at the meeting.

  Who? Well, all those – mostly bankers – who for the past 5 years bailed out European banks at the expense of preserving Greek participation in a doomed monetary union and avoiding the collapse of the Eurozone, an outcome which would lead to massive losses for the oligarchic status quo.

  But back to Greece where with a vote as close as that, the genie of the full-blown dissent within Syriza, which has a tiny majority of just 12 seats in Greece’s 300 seat partliament, is out of the bottle which could mean that the Troika’s long sought after goal of pushing Greece into a political crisis, may be just around the corner.

  As the WSJ reports, “Tsipras’s difficulty in selling a painful compromise to Syriza’s hard left, as well as to other parts of his ideologically diverse party, has become the largest obstacle to a deal. European officials and analysts—and privately even Greek government officials—say they don’t know whether the roughly 30 lawmakers who make up Left Platform will vote as defiantly as they talk if creditors’ terms are put before the Athens Parliament.”

  That may be a moot point, since Greece needs a deal yesterday: as a reminder, Greece has about 10 days of cash left, and this time there is no kicking the can – if there is no deal by June 5, Greece will be in default first to the IMF, and soon to everyone else.

  

   

  Worse, while Greece may not have decided to formally prioritize pensions and wages over IMF repayments, at least not yet, it has absolutely no working proposal to present to the Eurogroup ahead of this week’s latest meeting.

  The Central Committee agreed on a text saying any deal with creditors must involve no pension cuts, a small budget surplus before interest, increased public investment and a restructuring of Greece’s debt—terms that lenders are unlikely to accept. The text isn’t binding on Mr. Tsipras’s government but indicates how hard it will be to sell a deal to Syriza.

  But while some may have harbored hope that the Troika may agree to at least the smallest of concessions, after Sunday’s municipal vote in Spain which showed a dramatic plunge in popularity of the ruling PP, a harbinger of even even more “anti-austerity” platforms coming to power, Merkel will do everything in her power to make an example of Greece that nobody can dictate terms to the Troika and in the end it is a very simple choice: the German way or the autbahn.

  And just like that Greece is suddenly caught between the devil and the deep red lines: an intransigent Troika and potential rebels within the party itself.

  “The biggest threat may not end up being Mr. Lafazanis, but other parliamentary members who lack party discipline, who are newly elected and are completely unpredictable,” said Dimitris Keridis, an associate professor of international politics at Panteion University in Athens.

   

  Parliamentarian Ioanna Gaitani, a self-described Trotskyite in the Left Platform, said Greece can survive a debt default and lenders aren’t respecting Syriza’s mandate.

   

  “When faced with the pseudo-dilemma of ‘euro or national currency,’ the answer is a unilateral write-off of most of the debt, the taxation of large wealth, and the implementation of Syriza’s program,” she said. “For the Left, the needs of the people are above profits and debts.”

  The best news perhaps for Greece and everyone else who has been following this ultra slow motion trainwreck for the past 5 years, is that it is nearly over (one can hope), and that when it comes to defaulting, Greece has a truly exceptional range of choices how to make sure its last Euro-denominated check bounces in the most dramatic fashion possible.

  

  

  

  
  
  

  

• Meet The Veteran Who’s Been Reduced To Peddling For Change Online To Buy A New Leg

  By Simon Black of Sovereign Man

  Meet the veteran who’s been reduced to peddling for change online to buy a new leg

  Historian Will Durant once wrote “in the last 3421 years of recorded history only 268 have seen no war.”

  This is astounding. Warfare is constantly with us, often for the most absurd reasons.

  These days we’re told that the War on Terror makes us more free.

  We’re programed on days like Memorial Day to sing songs about our freedom and to thank the people in uniform for making us more free.

  The question I would respectfully submit is, do you feel more free today than you did 5, 10, 20 years ago?

  We now live in an era of unprecedented government intrusion.

  Senior citizens are thrown in jail for failing to file disclosure forms.

  Spy agencies arrogantly engage in illegal surveillance on their own citizens.

  And excessive force is so commonplace it barely registers as newsworthy any more.

  Curiously a number of polls from 2013 and 2014, including Gallup and the Washington Post, actually show that more people are afraid of the government than of terrorism itself.

  This isn’t freedom. And it’s a complete myth that soldiers fight and die in the name of freedom anymore.

  Warfare today means that a few people at the top of the military industrial complex, banking, and oil services companies become extremely rich. And everyone else pays the price.

  The price for everyday citizens is having less freedom than before.

  The price for future generations is inheriting a tremendous war debt.

  And the price for soldiers themselves is coming home wounded, limbless, or not at all.

  In today’s podcast, I introduce you to Joe, one of those recent veterans who lost his right leg.

  I recently met him while in the US, and he has an unbelievable story.

  Despite losing a limb in combat, Joe can’t get a new leg because the FDA won’t approve the procedure that he needs.

  It’s called osseointegration. And the FDA thinks that it might be too risky for Joe.

  Risky. Kind of like being in a combat zone in a country that never should have been invaded to begin with for reasons that were all lies, all to support a war that only makes the country less free.

  So since the government doesn’t think that Joe is responsible enough to make his own decisions, he now has to go overseas and pay tens of thousands of dollars out of his own pocket.

  Joe doesn’t have the money; so a family member set up a donation page on the Internet trying to get help. (I’m not publishing the link here because I’m going to take care of it myself.)

  It’s amazing when you think about it– a combat veteran who lost a leg supposedly fighting for ‘freedom’ can’t have the medical procedure he needs because a destructive government bureaucracy.

  That’s what freedom means today in America. And nobody’s fighting for it.

  Soldiers are off risking life and limb for oil companies, banks, and defense contractors. And citizens are distracted with bread and circuses.

  All the while, government power continues to expand at the expense of the individual.

  So today as we’re told to remember the fallen, we might also take a moment to remember the freedom we once had.

  And to think through the options for winning it back once again.

  Learn more about Joe’s unbelievable story, here:

  

  

  

  
  
  

  

• Police Takedown 101: U.S. Vs UK

  Early last month we highlighted a ThinkProgress report which suggested that more people were killed in encounters with police in the US in the month of March than were killed in encounters with UK authorities in 100 years. 

  From the report:

  A new report by ThinkProgress.com unearthed disturbing figures when it came to the number of police-related deaths that occurred in America in the month of March alone.

   

  Just last month, in the 31 days of March, police in the United States killed more people than the UK did in the entire 20th century. In fact, it was twice as many; police in the UK only killed 52 people during that 100 year period.

   

  According to the report by ThinkProgess, in March alone, 111 people died during police encounters — 36 more than the previous month. As in the past, numerous incidents were spurred by violent threats from suspects, and two officers were shot in Ferguson during a peaceful protest. However, the deaths follow a national pattern: suspects were mostly people of color, mentally ill, or both.

  In that context we bring you the following compare and contrast visual exercise.

  The UK…

  ….versus the US…

  Note: the suspect who was shot in the latter video clip was unarmed and died as a result of his injuries.

  The officer responsible killed another suspect in 2013 — he was cleared of wrongdoing in both cases.

  

  
  
  

  

• What Exactly Is Going On At Lake Mead?

  Following our exposure of the plunge in Lake Mead water levels post Friday's earthquake, officials were quick to point out that the drop was "due to erroneous meter readings" – which in itself is odd given we have not seen such an aberration before in the measurements. The data today shows a super surge in the Lake Mead water level – which, even more mysteriously, indicates from pre-earthquake to now, the Lake has risen by the most in a 3-day-period in years (as long as we have found history). How was this level 'manufactured' you ask? Simple – discharge flows from the Hoover Dam were curtailed dramatically. We are sure there is a simple explanation for all this…

   

  Yesterday we noted the plunge in Lake Mead water levels…

  

   

  Officials said – do not worry, the readings are faulty…

  Lake Mead's elevation has NOT dropped to 1,068 feet. Some inaccurate data was posted online. We are at 1,077 feet. http://t.co/a0YUo9iD0P

  — Lake Mead (@LakeMeadNRA) May 24, 2015

  Which resulted in this miracle…

  

   

  The biggest 3-day net surge in water levels (0.7 feet from Thursday to Sunday) on recent record…

  

   

  How was this miracle achieved (given the general lack of precipitation)? Were discharge levels curtailed drastically?

  

   

  Nope – nothing odd here at all…

  

   

  So what exactly is going at Lake Mead?

   

  Charts: Zero Hedge, LakeMead.water-data.com

  

  

  
  
  

  

• The Happiness Industry: How Government And Big Business Manipulate Your Moods For Profit

  The following is an excerpt from William Davies' new book The Happiness Industry: How the Government and Big Business Sold Us Well-Being (Verso Books, 2015):

  Since the 1960s, Western economies have been afflicted by an acute problem in which they depend more and more on our psychological and emotional engagement (be it with work, with brands, with our own health and well-being) while finding it increasingly hard to sustain this. Forms of private disengagement, often manifest as depression and psychosomatic illnesses, do not only register in the suffering experienced by the individual; they are increasingly problematic for policy-makers and managers, becoming accounted for economically.

  Yet evidence from social epidemiology paints a worrying picture of how unhappiness and depression are concentrated in highly unequal societies, with strongly materialist, competitive values. Workplaces put a growing emphasis on community and psychological commitment, but against longer-term economic trends towards atomization and insecurity. We have an economic model which mitigates against precisely the psychological attributes it depends upon.

  In this more general and historical sense, then, governments and businesses ‘created the problems that they are now trying to solve.’ Happiness science has achieved the influence it has because it promises to provide the longed-for solution. First of all, happiness economists are able to put a monetary price on the problem of misery and alienation. The opinion-polling company Gallup, for example, has estimated that unhappiness of employees costs the US economy $500 billion a year in lost productivity, lost tax receipts and health-care costs. This allows our emotions and well-being to be brought within broader calculations of economic efficiency.Positive psychology and associated techniques then play a key role in helping to restore people’s energy and drive. The hope is that a fundamental flaw in our current political economy may be surmounted, without confronting any serious political–economic questions.

  Psychology is very often how societies avoid looking in the mirror. The second structural reason for the surging interest in happiness is somewhat more disturbing, and concerns technology. Until relatively recently, most scientific attempts to know or manipulate how someone else was feeling occurred within formally identifiable institutions, such as psychology laboratories, hospitals, workplaces, focus groups, or some such. This is no longer the case. In July 2014, Facebook published an academic paper containing details of how it had successfully altered hundreds of thousands of its users’ moods, by manipulating their news feeds. There was an outcry that this had been done in a clandestine fashion. But as the dust settled, the anger turned to anxiety: would Facebook bother to publish such a paper in future, or just get on with the experiment anyway and keep the results to themselves?

  Monitoring our mood and feelings is becoming a function of our physical environment. In 2014, British Airways trialled a ‘happiness blanket’, which represents passenger contentment through neural monitoring. As the passenger becomes more relaxed, the blanket turns from red to blue, indicating to the airline staff that they are being well looked after. A range of consumer technologies are now on the market for measuring and analyzing well-being, from wristwatches, to smartphones, to Vessyl, a ‘smart’ cup which monitors your liquid intake in terms of its health effects. One of the foundational neoliberal arguments in favor of the market was that it served as a vast sensory device, capturing millions of individual desires, opinions and values, and converting these into prices. It is possible that we are on the cusp of a new post-neoliberal era in which the market is no longer the primary tool for this capture of mass sentiment. Once happiness monitoring tools flood our everyday lives, other ways of quantifying feelings in real time are emerging that can extend even further into our lives than markets. 

  Concerns about privacy have traditionally seen it as something which needs to be balanced against security. But today, we have to confront the fact that a considerable amount of surveillance occurs to increase our health, happiness, satisfaction or sensory pleasures. Regardless of the motives behind this, if we believe that there are limits to how much of our lives should be expertly administered, then there must also be limits to how much psychological and physical positivity we should aim for. Any critique of ubiquitous surveillance must now include a critique of the maximization of well-being, even at the risk of being less healthy, happy and wealthy.

  To understand these trends as historical and sociological does not in itself indicate how they might be resisted or averted. But it does have one great liberating benefit of diverting our critical attention outward upon the world, and not inward upon our feelings, brains or behavior. It is often said that depression is ‘anger turned inwards.’ In many ways, happiness science is ‘critique turned inwards’, despite all of the appeals by positive psychologists to ‘notice’ the world around us. The relentless fascination with quantities of subjective feeling can only possibly divert critical attention away from broader political and economic problems. Rather than seek to alter our feelings, now would be a good time to take what we’ve turned inwards, and attempt to direct it back out again. One way to start would be by turning a skeptical eye upon the history of happiness measurement itself.

  

  

  
  
  

  

• Obama "Remembers" Ramadi

  Never forget…

   

  

   

  Source: Investors.com

  

  

  
  
  

  

• OPEC's Next Meeting Is Nearly Upon Us…

  OPEC’s Next Meeting Is A mere 11 days away…

  
  

  On June 5, all eyes will be on OPEC as the group convenes in Vienna to discuss its course for the second half of 2015.

  It will probably be straightforward with no change to the status quo but it could be dramatic.

  The most bullish scenario that could occur would be for OPEC to reverse strategy and re-introduce production quotas. 

  The most bearish would be for OPEC to continue with no constraint at the same time as a nuclear agreement is reached allowing an unsanctioned Iran to re-enter the market at full throttle. 

   

  Not everyone is happy?

  Remember that prior to the November meeting, Iran, Venezuela and (non-OPEC) Russia engaged in frenetic efforts to convince the group’s Gulf leaders to cut output which went unheeded. 

  The facts are very clear.  No OPEC country can meet its budgetary requirements at this price level without digging deep into reserves. OPEC members face a financial crisis. They are collectively $1.6 bn poorer at this point in the year compared to last year. 

  To put this in perspective, data shows that prices are south of what 10 out of OPEC’s 12 members require for their annual budgets to break even. Qatar and Kuwait are exceptions, and Saudi Arabia holds $708 billion of reserves assets on which it can lean on for now. 

  So not suprisingly, from November to the present, officials from some of OPEC’s non-Gulf member countries have voiced concerns over OPEC’s Saudi-led market share strategy, as their economies feel the full brunt of lower prices which ironically may cause them to increase supply.

  Saudi’s oil exports accounted for 89% of the country’s total revenue last year. The fall in oil prices is decreasing the value of these exports, leading to a potential budget shortfall. In its 2015 budget, Saudi plans to spend about $230 billion but expects to accrue in $190.7 billion in revenue, yielding an overall deficit of $38.6 billion. While the oil price assumption was not specified in the budget, it was calculated in December, when oil prices were between $55 and $70/bbl.

   

  To maintain spending they will have no choice but to tap its $708 billion Sovereign Wealth Fund, which while enough for the short term it will not last forever when $50 billion is required to be drawn annually.

  Is the strategy working??

  However Saudi’s market share defense strategy seems to be working. As Saudi Arabia’s production rose to a record high US production growth has started to slow showing that the plan may have worked?

   

  Saudi Vs US Rig Count

  To judge success, its helpful to remember what the strategy coming out of the last meeting was exactly:

  • Maintain production. This will continue to drive down prices. (Saudi has done just that, in fact saying it achieved record production of 10.3m barrels a day in April.)

  • These lower prices will exert economic pressure on US producers who need higher prices to break even. (1Q earnings calls were replete with references to this reality as company management teams sought to explain their rationale for curtailing Capex, projects, and implementing headcount reductions.)

  • If prices are driven down to $60/barrel, a fair portion of shale production becomes uneconomical. (WTI hit its low this cycle on March 17, at $43.46. Brent previously hit its low on January 13, at $45.59. These levels were well below the breakeven prices that analysts had assessed wherein unconventional drilling would be uneconomic. More importantly, however, the falling prices presaged a curtailment of existing activities, and the cash flow derived therefrom. Less cash flow = less investment = scaleback of activity.)

  • With diminishing US shale production, OPEC will in the longer-term regain its clout in the global oil market. (Though the US is losing the market share battle, this does not immediately translate to a definitive “win” for OPEC.)

   

  

  US Production Starting To Slow, But Companies Preparing To Ramp Up

  The price of WTI increased over 40% from the low on the assumption that the glut is easing. As noted above, OPEC’s May report said this response began at the end of the third week of March. Further, the IEA’s monthly report projected US shale-oil output growth to slow by 80,000 bpd in May.

  A recent Wall Street Journal report claiming that a paper has been prepared by the OPEC Secretariat which sees oil prices depressed for a decade and recommending the re-introduction of quotas vigorously denied. It is rare if not unprecedented to see such a strong denial from OPEC and it demonstrates the sensitivities that surround the next meeting. It is reasonable to assume that it is indicative of divided opinion as to how OPEC should respond to the price collapse. 

  Summing up there is nothing in the latest monthly reports from either OPEC or the EIA to suggest that the price fall has had a dramatic effect on global demand or non-OPEC supply. The crude supply excess was huge in 1Q and will continue to be huge in this quarter. Perhaps bulls can take some solace from the possibility that a lot of this excess has disappeared into Chinese strategic storage, never to re-appear. There is no way of being sure. Suffice it to say that last year global stocks built by an average of 900,000 bpd. This year they will grow by of the order of 1.5 mbpd. 

   

  The Meeting Before The Meeting

  It is very important to note that the days leading up to the June 5 gathering have already been marked by busy travel schedules by both OPEC and non-OPEC representatives. 

  Russia’s Energy Minister Alexander Novak said he and other Russian officials will meet with OPEC to discuss whether to adjust production on June 2-3, according to Bloomberg. Novak met with officials from Venezuela, Mexico and Saudi Arabia prior to the November meeting.

   

  So What next?

  Bullish fears of the risk of a cut combined with a retracement of the dollar has given the bulls the upper hand against facts and forecasts of oversupply. These factors supporting the upward momentum cannot be underestimated and could drive prices even higher in the immediate future. 

  The current situation feels very similar to the first half of last year when the numbers were overwhelmingly bearish yet prices defied gravity and kept rising. A big surplus in the physical markets and very high levels of speculative length are a toxic combination. The big difference to last year is that the price level is 40% lower. 

  Looking at the broader fundamental picture, however, I cannot help but compare the current price strength to the myth of Sisyphus, the king of Corinth. He was condemned by gods to ceaselessly rolling a rock to the top of a mountain only to see it roll back down to repeat this action forever. The top of the current bull mountain might not be close but unless there is a fundamental change in the physical supply/demand balance, the rock might start rolling back down shortly again just like it did in the second half of 2008 and 2014 only for the bulls to start the arduous uphill battle all over again.

   

  www.maunaki.com 

   

   

   

   

   

  

  
  
  

  

• The Birds & The Bees: Suicide By Pesticide

  Submitted by Chris Martenson via PeakProsperity.com,

  As you are aware, honey bees have been suffering from something called Colony Collapse Disorder. In practice, what this means is that the bees simply vanish from their hives, leaving behind their most precious worldly possessions: honey and larvae.

  What causes these mysterious vanishing acts has been something of a mystery. But because the phenomenon began really ramping up in 2006, we can focus in on some suspects.

  While it’s always possible that the bees are suffering ‘death from a thousand cuts’ — where it’s no one specific thing but rather a wide range of minor insults, ranging from loss of forage to herbicides to fungicides to pesticides — there’s actually quite strong evidence pointing to a specific class of pesticides called neonicotinoids.

  This class of pesticides is massively and indiscriminately toxic. More specific to our investigation here, it was only introduced into widespread use shortly before the massive bee die-offs began.

  Biocide = Suicide

  Actually, it’s not really proper to call neonicotinoids ‘pesticides’ because they don't solely target pests. They should more accurately be called ‘biocides’ because they kill all insects equally and indiscriminately.

  How toxic are they?

  The neonics are so toxic that it's sufficient to simply lightly coat a seed with it before planting. When the seed grows to maturity, the plant will still have enough absorbed toxin circulating within its system to kill any insect that munches on it or sucks on its sap.

  Think about that for a minute. Coat a kernel of corn with a neonic, sow it, and the mature plant will still be lethal to a corn borer when the corn ears develop several months later.

  But not just to insects:

  "A single corn kernel coated with a neonicotinoid can kill a song bird." As a long time environmental lawyer and campaigner, I should not have been stunned by that fact but I was. Shaking my head in dismay, I read on, "Even a tiny grain of wheat or canola treated with the …neonicotinoid… can fatally poison a bird."

  (Source)

  Ugh. Boy, that depresses me — thinking of the mentality in play that allows one to conceive of and then use such powerful poisons simply because one wants to engage in lazy farming. Hard farming requires knowing how to rotate crops, use beneficial natural relationships, and work intimately with the land on which you farm so as to minimize pest losses while maximizing the abundance of both your crops and the local ecosystem.

  Sadly, the indiscriminate neonic killers are being used very widely. The mentality at play might as well be kill them all and let god sort them out.  And therefore we are literally taking out whole swaths of life; both observed as in the case of the honey bee, and unobserved in the case of the many, many organisms not commercially or recreationally important enough to us to notice and track.

  Killing off organisms in an ecosystem using indiscriminate biocides is quite literally a slow form of suicide for us humans. As within, so without.  You cannot poison and kill of the world around you without poisoning and killing yourself.

  Simply put: We are killing ourselves. And the data is literally horrifying.

  The Birds and the Bees

  If the thesis that neonics are harmful to both pests and other life forms alike is correct, then we should be able to detect those effects both with direct studies and indirect measurements.

  Here’s where the horrifying part comes in. All of the data agrees: neonics are stone cold killers.

  Insecticides Linked To Farmland Bird Population Declines

  July 10, 2014

   

  A new study in the journal Nature has found that use of neonicotinoids is linked to a decline in the populations of farmland birds across Europe.

   

  For the study, scientists from Radboud University in the Netherlands and the Dutch Centre for Field Ornithology and Birdlife Netherlands (SOVON) analyzed long-term data for both farmland bird populations and chemical amounts in surface water. They discovered that in locations where water held high amounts of imidacloprid, a standard neonicotinoid, bird populations were known to decrease by an average of 3.5 percent on a yearly basis.

   

  “In ten years it’s a 35 percent reduction in the local population, it’s really huge,” study author Hans de Kroon from Radboud University told Matt McGrath of BBC News. “It means the alarm bells are on straight away.”

   

  The study team said the insecticide is probably coating seeds that the birds like to eat – as well as leaching into both water and soil around the sprayed areas. They added that neonicotinoids can persist in the environment for up to three years.

  (Source)

  Here we have a study that shows huge and dramatic negative impacts on bird life. A massive culling of more than a third of the bird populations in ten years is a really disturbing figure. In places where the water held high concentrations of neonics, bird populations were hit hardest.

  The other interesting finding in the above the study was that the neonics were found in the water supply.  They are not supposed to end up there, but they do, as we now know:

  Bee-Killing Pesticides Found in Midwest Rivers

  Aug 4, 2014

   

  PESTICIDES LINKED TO declining bee and bird populations have been found in streams across the upper Midwest, raising yet more concerns about these chemicals’ environmental effects.

  Researchers from the United States Geological Survey tested waters at nine sites in Iowa and Nebraska. They found neonicotinoids in each, frequently at levels that may harm insects and the life that depends on them.

   

  “This wasn’t a toxicity study, but there’s research out there indicating that these concentrations could be of concern,” said USGS chemist Michelle Hladik, lead author of the paper describing the survey in the journal Environmental Pollution.

  (Source)

  Given just how toxic the neonics are, I have to wonder what the effect of them are on all the insect life that has water in its life stage: the mayflies, stoneflies and caddis flies. If these insects are killed, then you will find big declines in the bird populations that depend on those same insects for their food supply.

  And/or if the insects are carrying sub-lethal levels of the neonic biocides in them, then the birds may be bio-concentrating the toxin to detrimental if not lethal levels in their own bodies.

  I have to ask: What sort of a so-called ‘civilized’ nation, in this day and age, allows toxic levels of pesticides (or biocides as the case may be) to build up at hazardous levels in surface water in the first place?

  What’s so important about selling a few bucks more to enable giant chemical firms and certain farmers to practice lazy farming that we’re willing to sacrifice the complete loss of critical elements of key ecosystems?

  We may not tend to appreciate insects, but they are utterly and fabulously essential to everything we hold dear.  You cannot just kill them all without upsetting the myriad finely-tuned systems of which both they and we are components.

  While we have a lot of data on honey bees because they are commercially kept and tracked, the wild bees are not really tracked all that carefully. But we know enough to conclude that they, too, are suffering:

  Neonicotinoid pesticides dramatically harm wild bees, study finds

  APR 22, 2015

   

  A common type of pesticide is dramatically harming wild bees, according to a new in-the-field study that outside experts say may help shift the way the U.S. government looks at a controversial class of chemicals.

   

  But in the study published by the journal Nature on Wednesday, honeybees — which get trucked from place to place to pollinate major crops like almonds— didn't show the significant ill effects that wild cousins like bumblebees did. This is a finding some experts found surprising. A second study published in the same journal showed that in lab tests bees are not repelled by the pesticides and in fact may even prefer pesticide coated crops, making the problem worse.

   

  Scientists in Sweden were able to conduct a study that was in the wild, but still had the in-the-lab qualities of having control groups that researchers covet. They used 16 patches of landscape, eight where canola seeds were coated with the pesticide and eight where they weren't, and compared the two areas.

   

  When the first results came in, "I was quite, 'Oh my God,'" said study lead author Maj Rundlof of Lund University. She said the reduction in bee health was "much more dramatic than I ever expected."

   

  In areas treated with the pesticide, there were half as many wild bees per square meter than there were in areas not treated, Rundlof said. In the pesticide patches, bumblebee colonies had "almost no weight gain" compared to the normal colonies that gained about a pound, she said.

  (Source)

  The bumblebees are essential to the overall state of the ecosystems of the world because they pollinate things that honeybees don’t. There is some overlap, but the bumblebees are able to reach deeper into certain flowers and have different platn preferences than honeybees, so they are not replaceable.  They are unique contributors. If they go away, so will the many plants that depend on them for their life cycle.

  And it gets worse:

  Beyond Honeybees: Now Wild Bees and Butterflies May Be in Trouble

  MAY 6, 2014

   

  Among other pollinators, iconic monarch butterfly declines are well documented: Their numbers are now at a small fraction of historical levels. And entomologist Art Shapiro of the University of California, Davis spent most of the last four decades counting butterflies across central California, and found declines in every region.

   

  These declines don’t just involve butterflies that require very specific habitats or food sources, and might be expected to be fragile, but so-called generalist species thought to be highly adaptable. Many other entomologists have told Black the same thing.

   

  “Species that used to be in all our yards are dropping out, but nobody’s monitoring them,” Black said.

  (Source)

  It’s the butterflies, too. Certainly in my own personal experience, I’ve noticed a lot fewer butterflies in my backyard over the past several years. We plant flowers specifically for bees and butterflies, so I'm something of a casual tracker of their types and numbers.

  Even more recently, we have solid data showing a dose-response where the heaviest neonic use correlates with the heaviest honeybee die-offs:

  Bee Die-Offs Are Worst Where Pesticide Use Is Heaviest

  May 14, 2015

   

  The nation’s honeybee crisis has deepened, with colony die-offs rising sharply over last year’s levels, the latest survey from the US Department of Agriculture-funded Bee Informed Partnership shows. A decade or so ago, a mysterious winter-season phenomenon known as colony-collapse disorder emerged, in which bee populations would abandon their hives en masse. These heavy winter-season losses have tapered off somewhat, but now researchers are finding substantial summer-season losses, too.

   

  And here’s a map a map depicting where losses are heaviest:

  

  (Source)

  The article goes on to cite much of the direct as well as circumstantial evidence we have that these biocides are the culprits for much of the damage cited above.  Take a look at both where the usage of the neonics is heaviest and when they began to be used in earnest (charts below) and then recall that the bee, butterfly, and bird declines all began around 2006 and have gotten measurably and drastically worse in the last few years.

  

  

  

  Hmmmm….seems to me that in any court of law, and in the mind of any reasonable person, there’s enough evidence here to say that there’s a very big problem and the neonics are the likely culprits.

  One bird that I’ve always loved in the Sparrow Hawk, or American Kestrel as it is now more properly called.  The smallest of the hawks it is brightly colored and was a very prominent bird of my childhood. They used to be everywhere.

  Now they are quite scarce in my area. And because nobody makes any money off of them, only a few ‘birders’ seem to notice or care.

  But these mainly insect-eating birds are in serious decline:

  American Kestrel Population Drops Dramatically, And Without Fanfare

  Jul 29, 2014

   

  On a national level, the American kestrel (Falco sparverius) population has been plummeting. Records from the North American Breeding Bird Survey, a massive annual data collection effort for more than 400 bird species overseen by the U.S. Geological Survey (USGS) and the Canadian Wildlife Service, show the kestrels have declined by an estimated one and a half percent each year between 1966 and 2010. The long-term loss is almost 50 percent of the population. That’s a big drop for a bird considered abundant in North America.

   

  A handful of things could be causing the lower kestrel numbers, bird biologists say, including increased predation by Cooper’s hawks, continued exposure to pesticides, and competition at nesting sites by European starlings.

  (Source)

  Every biologist struggles to explain the massive losses in their chosen area of study due to ‘natural causes.’  But the easier and more obvious choice is ‘humans are doing something, and it’s killing off this thing I am studying.’ 

  So when we put all of the above together, it's obvious that Rachel Carson’s Silent Spring has taught the US EPA and businesses nothing at all.

  You would think that in the wake of the DDT disaster that we’d be more careful. But that’s just not the case.  The exact same mistakes are being made here again. And it is beyond a tragedy because this time it’s being done with our full awareness.

  Obviously, the sorts of environmental impact and toxicity studies that were supposed to be done were either forgone, or done fraudulently.

  The Response

  After a lot of hue and cry, and years and years of solid studies and accumulating evidence, the EPA finally took a stand and issued new firm rules for the neonics.

  However, don't just scan the headlines because you’ll end up with the wrong impression.

  Read more carefully:

  EPA Restricts Use of Pesticides Suspected of Killing Bees

  Apr 2, 2015

   

  The EPA has issued a moratorium on use of a type of pesticide theorized to be responsible for plummeting bee populations. Neonicotinoids are a class of common pesticides that recent research has pointed to as being harmful to birds, bees and other animals.

   

  The EPA previously approved their use, but outcry over the damage being done has caused the agency to reverse course while more studies are done. On Thursday, the EPA sent letters to people and companies that have applied for outdoor use of the pesticide, saying that new use permits won’t be issued.

   

  New uses of neonicotinoids will no long be approved “until the data on pollinator health have been received and appropriate risk assessments completed,” the EPA letter reads. Existing permits to use them, however, will not be rescinded — something wildlife and environmental advocacy groups are unhappy with.

  (Source)

  The headline implies that the EPA is now limiting the amount of neonic being used but that's not the case at all.  As a result of their 'ruling' even more could be used in the near future, or maybe less, but the ruling itself does nothing to restrict how neonics are currently being used because it only applies to 'new' uses. 

  Are you kidding me? This represents the ‘middle ground’ the EPA sought?

  Every single current use of neonics will continue.  By the way, one “use” is using neonics to treat corn.  Or wheat, or any other already approved “use.”  Those use maps above will continue unabated while the EPA 'studies' the issue, a process that could take a decade or more.

  The ruling means that farmers newly considering using these biocides will not be blocked in any way shape or form as long as they are going to use them in a way that's already approved.

  So, the exceptional and mounting damage will continue.

  This is pathetic, and it is an outrage. It represents everything that is wrong with America today.

  There is both economic damage being done to beekeepers and everybody who depends on their services, and there is massive environmental and ecosystem damage being done. The EPA has ruled that a few hundred million dollars of sales for major chemical companies outweigh every other right in this story, including the basic right of all life to simply live.

  [Note for subscribers, this is a new set of paragraphs inserted to keep up with recent developments]

  More recently, the Obama administration has unveiled the results of a task force meant to study the plight of the pollinators and make recommendations on how to support them.

  How the White House plans to help the humble bee maintain its buzz

  May 9, 2015

   

  On Tuesday, the Obama administration will announce the first National Strategy to Promote the Health of Honey Bees and Other Pollinators, a bureaucratic title for a plan to save the bee, other small winged animals and their breeding grounds.

   

  The strategy, a copy of which was obtained by The Washington Post, will seek to manage the way forests burned by wildfire are replanted, the way offices are landscaped and the way roadside habitats where bees feed are preserved.

   

  “What are we doing on bees?” Obama asked Holdren as they prepared to wrap up an Oval Office meeting in the summer of 2013. “Are we doing enough?”

   

  That discussion led to the launch of the White House Pollinator Health Task Force, whose recommendations are being unveiled Tuesday.

   

  CropLife America chief executive Jay Vroom, whose group represents pesticide manufacturers and participated in the task force, said that while his members might disagree with the EPA at times, they’ve “continued to be science-based and balanced” at the agency.

  Not at all surprisingly, given the fact that we have 8 years of increasing and highly obvious evidence of neonicotinoid inflicted damage, the Obama task force came out with recommendations to study pesticides for a few more years and then devote a couple of nickels and a lot of lip service to increasing ‘habitat.’

  I know that the task force came up with diddly squat because the main pesticide promoting trade association representing the manufacturers of pesticides and other agricultural chemicals, the ill-named CropLife America, loved the resulting recommendations.

  That’s all I need to know that this task force was a joke, came up with nothing useful, and ended up protecting narrow economic interests as opposed to protecting broad life supportive aims.

  The very idea that it’s habitat that’s at fault here, rather than the chemicals is just another insult to everyone of reasonable intelligence.

  The American Way

  I find it increasingly difficult to believe in the things the country in which I live stands for.

  In Germany, where the various interests are more carefully balanced, and where people and beekeepers actually have some say, things are very different.

  From 2008:

  Germany bans chemicals linked to honeybee devastation

   

  Germany has banned a family of pesticides that are blamed for the deaths of millions of honeybees. The German Federal Office of Consumer Protection and Food Safety (BVL) has suspended the registration for eight pesticide seed treatment products used in rapeseed oil and sweetcorn.

   

  The move follows reports from German beekeepers in the Baden-Württemberg region that two thirds of their bees died earlier this month following the application of a pesticide called clothianidin.

   

  "It's a real bee emergency," said Manfred Hederer, president of the German Professional Beekeepers' Association. "50-60% of the bees have died on average and some beekeepers have lost all their hives."

   

  Tests on dead bees showed that 99% of those examined had a build-up of clothianidin. The chemical, produced by Bayer CropScience, a subsidiary of the German chemical giant Bayer, is sold in Europe under the trade name Poncho.

  (Source)

  Several things are fascinating here.  First, the neonic clothianidin is actually manufactured by a German company, and it’s the same company that sells the stuff in the US. You’d think that, if anything, the German government would work harder to protect the economic interests of its own companies more than the US EPA. But you’d be wrong.

  Second, this was way back in 2008. German beekeepers had one very bad incident with the chemical, the appropriate tests were run, the risk was deemed unacceptable and the pesticide was yanked from the market.

  That’s how these things are supposed to work.

  Yet in the US, it is now seven years after that and the EPA has only gotten around to nixing new uses for the compounds that are now widely used and destroying insects and birds across a huge swath of the country.

  Even if it would cost somebody a whole lot of money, and maybe even make farming a touch less lazy and require more effort, I would personally favor banning every and any pesticide and herbicide and fungicide until all of the appropriate long-term toxicological studies had been carried out.  They are not that difficult to run, they just cost money and take time.

  No ‘grandfathered’ uses. No exceptions. Prove the stuff is safe or else it cannot be sold or used.

  But that’s because I would choose life over money. And that’s apparently where I part ways with my country, at least as far as the US government is concerned.

  Unintended consequences

  The prediction here is easy enough to make. The law of unintended consequences is going to rear up and bite us. Again.

  One cannot simply wipe out entire swaths of insect and bird populations without causing eventual and massive difficulties.

  One day we’ll wake up and wonder why some pest has gotten totally and uncontrollably out of hand. And if we chase it down, we’ll discover some beautifully complex natural cycle that involved a host species, a predator, a plant and animal and a few other creatures that used to dance to a song that had been written and perfected over a hundred million years of evolution.

  Break the dance, and you break the web of life. 

  Mark my words, ‘insects’ is going to become a very hot topic over the next few years. And my sincere hope is that we do not destroy too much and that we figure this out before it’s too late.

  For now, all I can say is: Shame on you, EPA.  Deep, and lasting shame on all of you.

  Conclusion

  All of this leads me here: We desperately need a new narrative.

  The old one not only allows but encourages the neonic story, and a hundred others just like it, to take root and flourish.

  We cannot begin to fight each battle — neonics and fracking waste water disposal and leaking Gulf of Mexico wells and money in politics – and hope for anything more than a slight delay of the arrival of our miserable end.

  Instead we have to have a new narrative where it is emotionally impossible for an EPA staffer to approve neonics because they would be too horrified to do so.  I could not use them, but that's because I have an internal narrative that values all life.

  While I certainly think people should fight these battles, those skirmishes are for naught if another crew (that’s us) is not paving the way for that new narrative at the same time.

  If we were to have a new Declaration of Independence, it might start with these words (from our group effort):

  "We hold these truths to be self-evident, that all people are created equal and that all life is sacred.  That all people are endowed by their Creator with certain unalienable Rights and Responsibilities.  That among these Rights are Life, Liberty and the pursuit of Happiness, and among these Responsibilities are to live in Harmony with Nature, to be Stewards for the Natural World, and to leave a World Worth Inheriting to our Posterity."

  I am sickened by the damage being done by the neonics and I am dismayed by the pathetic and weak response by the so-called regulators at the EPA.

  In a healthy culture these people would be packed off to new jobs, and they would be shunned by thoughtful people until they had atoned for their ridiculous actions.

  But that is not yet the world in which we live.

  A more subtle point to be made here is that each of us needs to prepare for the fact that the people in authority, even when confronted with compelling and obvious data, will choose to put profits over life and favor doing nothing over something.

  In short, stories like this one cement my view that we face a future that will be shaped more by disaster than design, and that we each need to prepare for that as best we can.

  

  

  
  
  

  

• There Is No Longer A Market: Citigroup Confirms What Zero Hedge Has Said Since 2009

  “Zero Hedge long ago gave up discussing corporate fundamentals due to our long-held tenet that currently the only relevant pieces of financial information are contained in the Fed’s H.4.1, H.3 statements… macro economic data now is essentially one big joke.”

        – Zero Hedge, January 2010

   

  “we have been saying since day one […] that when it comes to securities price formation in a centrally-planned regime, it is flow not stock that matters.”

       – Zero Hedge, June 2012

   

  Those were the rantings of a “tinfoil hat-wearing”, “conspiracy theory-heavy” website, which dared to speak up time and again against widely-accepted economic and financial dogma, which has been the foundation of the Fed’s flawed experiment now in its 8th year.

  And they were right.

  Here is what the global head of credit strategy at Citigroup just said this last Friday.

  If there were any lingering doubt, this week’s gyrations demonstrate neatly that it is central bank liquidity, not  fundamentals, driving markets. It is the flow, not the anticipated stock, of QE which counts.

   

  … Central bank policy pronouncements are almost the exclusive driver of market movements at the moment, not fundamentals. Almost all the fixed income investors we meet bought into this idea some time ago – perhaps unsurprising, given the extent to which credit spreads have been diverging from corporate leverage, and seem likely to continue to do so even as leverage rises further (Figure 4). In equities, there are still a few holdouts – but the longer that downward revisions to earnings revisions are met with record highs in markets (Figure 5), the more widely accepted the idea becomes.

   

  
  

   

  … In govies, it has been slightly harder to fathom what is going on – but what remains clear is that it doesn’t have much to do with fundamentals. No wonder the backup in US yields is now fading when it occurs against the most protracted period of negative economic surprises since 2011 (Figure 6). Each successive month’s disappointment on retail sales adds to the likelihood that consumers’ appetite for spending vs saving has fundamentally altered – not just that the benefits from the oil price drop are a little slow to feed through (Figure 7).

   

  

   

  … with central bank liquidity the ultimate source of all market movements, investors [are] forced to shun fundamentals and instead hang on the central banks’ every word. At some point, of course, the risk is that the taps are turned off: recent speeches from Yellen, Draghi and others do demonstrate an increasing unease with market behaviour, and an increased emphasis on financial stability and the need for structural reforms. But with the underlying economy still weak, and vulnerable to a sharp sell-off in markets, we fear they will find that mangling, once started, is hard to stop. Particularly when they remain at least partly in denial as to the extent of it.

  And since the market no longer exists, and soon, courtesy of double seasonally adjusted “data” economic reporting and analysis will be just as meaningless, soon the Fed, having destroyed trading as we know it not to mention the US middle class, will also succeed in ending financial reporting once and for all.

  

  
  
  

  

• Inflation Watch: Prices To "The Happiest Place On Earth" Are Up 2900% Since 1971

  Having previously shown that money can buy happiness, it appears, as Bloomberg reports, that the cost of buying that happiness is soaring. With well-managed government-provided statistics on inflation, why would one look elsewhere for clues as to the declining standards of living across much of America… but look we did and with wages stagnant, the 2900% surge in prices to Disneyland since 1971 makes ‘the happeist place on earth’ a place only the wealthy can afford to visit.

   

  

   

  //

  

  

  
  
  

  

• The Case For Nationalizing Monsanto

  Submitted by Charles Hugh-Smith of OfTwoMinds blog,

  Ridding the world of Monsanto via a state buy-out would be a boon to humanity. 

  Capitalism fails in two situations: monopoly and state-capital cronyism. Monopoly extinguishes competition and that effectively extinguishes capitalism.
   

  When the elites of the state and private capital collude, i.e. crony capitalism, the few gain power and wealth at the expense of the many.
   

  The state (broadly speaking, government) fails when it serves the few at the expense of the many, while claiming to serve the interests of the many. The state only fulfills its purpose when it serves the interests of the many at the expense of the few who control the majority of the political power and private wealth.

   

  Monsanto is the epitome of monopoly and crony-state collusion. But Monsanto's grip is not only on the throat of the nation– through its monopoly on seeds that it enforces globally, its grip is strangling the entire world.
   

  Monopolies on food, energy and water (what I term the FEW resources) are not like monopolies on discretionary goods and services. People have to pay whatever the monopoly charges, as substitutes are either unavailable, very expensive or under the control of the same cartel/quasi-monopoly.
   

  Before Monsanto extended its grip as the state-enforced seed monopoly, state universities and extension services developed seed strains and provided the seeds for a nominal cost.Over time, this publicly owned and managed system of providing low-cost seeds has eroded under pressure from for-profit private firms such as Monsanto and the benign neglect of a government that has been captured by private interests and self-serving elites.
   

  The supposed benefits of costly monopoly-developed GMO seeds is increasingly being questioned: Plant Breeding vs. GMOs: Conventional Methods Lead the Way in Responding to Climate Change.
   

  The rapid advance of gene sequencing is opening new doors for much quicker development of conventional plant breeding techniques that require no genetic modification (GMO).
   

  If the American people wanted to bestow a gift to the world that would be valued by billions of people yet would cost the American citizenry a ridiculously modest sum, it would be to nationalize Monsanto and provide its seed products for free. To do this requires letting go of all the self-serving neoliberal fantasies that crony-capitalists propagandize to protect their monopolies: for example, only the profit motive drives innovation, so only private companies can supply the world with advanced seeds.
   

  All this propaganda boils down to defending monopoly and cronyism as capitalism–The Big Lie of all monopolists and crony-capitalists. This was the reason given for privatizing publicly owned utilities that are then transformed into highly profitable monopolies–the precise opposite of capitalism's primary engine of innovation.
   

  Monsanto is worth around $57 billion. Compare this to the Federal debt of $18 trillion, or the full lifecycle cost of the bloated F-35 fighter aircraft program, which weighs in at $1 trillion. We should also compare $60 billion with the $16.8 trillion that the Federal Reserve loaned the world's too big to jail banks.
   

  

  Ridding the world of Monsanto via a state buy-out would be a boon to humanity, and doing so for a mere $57 billion would be a bargain–especially when you consider the $3 trillion the state has squandered on endless wars of choice and the trillions of dollars the Federal Reserve and the government have squandered propping up the self-serving, parasitic cartel of too big to jail banks.

  

  

  
  
  

  

• Greece's Problem

  Everything is better (and fixed) once you can print…

   

  

   

  h/t @RudyHavenstein

  

  

  
  
  

  

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